Captain Fastbastard Mayhem Posted February 7, 2017 Share I agree that you should not spend your last cent on buying a car cash.However if you can buy the car cash and after that monthly invest the amount equivalent to the PMT of the car you bought into an investment account you score both ways. This way when it is time to replace your car you have the original money plus the interest plus your trade-in value available. I'm always on the lookout for a good investment. But as you said the performance of the funds are not guaranteed and the rest of the investment accounts cannot provide you the interest that you pay on your car.If you can do that, then yes. Brilliant. But the large majority of people I know do not have the ability to do that and not dip into their funds... You'll have the deposit from the value of your car at the end of the payment term whichever way you go, though. Link to comment Share on other sites More sharing options...
lechatnoir Posted February 7, 2017 Share Buying anything on HP is not necessarily a bad thing. We do it with houses and cars all the time. The point is go into the agreement with your eyes open and know what the numbers mean to you over the life of the contract. You pays your monies and you makes your choices... one man's meat, is another man's poison Captain Fastbastard Mayhem 1 Link to comment Share on other sites More sharing options...
GrahamS2 Posted February 7, 2017 Share NEVER buy a car cash, unless your credit record is trashed or the car is significantly cheaper than the retail price, or it's too old to qualify for cheap credit.. Rather invest the cash and use the growth in asset value, interest earned & dividends yielded to pay for the finance. Then you still have R 350k + growth at the end of the day and you have a car paid off. It fully depends on the cost to finance (rate + fees), and how much risk you're willing to expose your capital to in order to try and beat the cost of finance. Also, there's no guarantees in investments (as you'd well know ). P.s. The jse only grew 3% as a whole last year, so that wouldn't have worked too well for someone financing their car at 12%... Link to comment Share on other sites More sharing options...
Captain Fastbastard Mayhem Posted February 7, 2017 Share It fully depends on the cost to finance (rate + fees), and how much risk you're willing to expose your capital to in order to try and beat the cost of finance. Also, there's no guarantees in investments (as you'd well know ). P.s. The jse only grew 3% as a whole last year, so that wouldn't have worked too well for someone financing their car at 12%...sigh... you didn't read the followup posts, did you? Link to comment Share on other sites More sharing options...
Spock Posted February 7, 2017 Share It is possible to use debt finance wisely and to your advantange... Paul Ruinaard and Omlette 2 Link to comment Share on other sites More sharing options...
Bomberman Posted February 7, 2017 Share Is the OP buying a bike or are we buying cars? Lexx, Mongoose!, slickandtyred and 3 others 6 Link to comment Share on other sites More sharing options...
porqui Posted February 7, 2017 Share It is possible to use debt finance wisely and to your advantange... Yep! Link to comment Share on other sites More sharing options...
Paul Ruinaard Posted February 7, 2017 Share You'll get many people saying it's stupid and you should save up. And it's probably very sound advice. Some advice given previously was that you should never finance toys. And it's great advice. But for some of us, we will never be in a position to have many tens of thousands sitting and available for a bike purchase. When you're on this end of the payscale, it's just not viable. There will always be something more responsible to do with that kinda cash. Not only that, but I think if you're working hard, cycling is a healthy habit that can justify the money. If you stop smoking or parrying and spend the money on a monthly payment, then I think that's very fair. You're also allowed to have nice things, even though you might not be on the upper echelon of earners. Also, to all those who advise the save up and buy later option, I don't agree. With the way cycling prices go up each year, I'm afraid you'll never save to have the bike you want. Obviously you take some risks with financing anything, but if you can comfortably afford the payments, and can handle things if it goes wrong, then go for it man.I always have a policy of rewarding myself for the hard work i put in to something no matter what. That has over the years been bicycles and it has made my life a lot happier. Strangely enough i just bought a new bike and decided to pay it off even though i had the cash. I sometimes work better if i preserve capital in my mind rather than blow it. So i am committed to paying it off and at the end of the day in my mind i will invest the capital and force myself to work to pay things off - possibly quicker. Then i normally go and see what the payment that i have just "saved" by paying it off, can buy me. THat is how i ended up with motorbikes as well. Toys in my mind you need to not invest capital in as the depreciation is horrendous. Crazy attitude and financially i know its not true but its lead me to work a lot harder to pay off things than to just stump up the cash. leeubok and Captain Fastbastard Mayhem 2 Link to comment Share on other sites More sharing options...
GrahamS2 Posted February 7, 2017 Share sigh... you didn't read the followup posts, did you? Well you did say never Edited February 7, 2017 by GrahamS2 Link to comment Share on other sites More sharing options...
nonky Posted February 7, 2017 Share Not at a guaranteed rate, and it depends on the fund in which you're investing. If you're solely looking at guaranteed income / rates of return and conservative funds then the comparison falls down. At the moment the line is very blurred as investment performance is choppy at best (ALSI is flat over a 2 year period) but taking a fund such as AG Balanced you're looking at a historic 12.8% return over the last 5 years. Last 3 years have been an avg 9.2% p/a so there you can see the effects of the market volatility. An addendum to the point above is that you always have the opportunity of utilising the cash (investment) to pay off the car should the poo hit the fan and you're needing to pay it off ASAP, or for whatever other life need comes along. The point is that a car is a depreciating "asset". It's a cost. An illiquid one, at that. IMO you shouldn't be buying it cash unless you're in one of those 3 situations: 1 - your credit record is shot2 - car is too old for finance3 - significantly cheaper than the retail cost And the last is debatable. Okay - there's a 4th one. You're significantly cash flush and the cost of the car is a blip on your radar. But then your car was probably bought with 6 months worth of interest income. Myles, i'd be helluva careful providing financial "advice" if you work in financial services, especially if you're a Rep, KI or similar. Just a word of caution from your friendly bikehub compliance dept. Captain Fastbastard Mayhem 1 Link to comment Share on other sites More sharing options...
Patchelicious Posted February 7, 2017 Share Brilliant, the next time I want to get some foreign investment advice, I'll just ask the BikeHub about where I can get an XT cassette...... Kalahari Vegmot, Captain Fastbastard Mayhem, peetwindhoek and 3 others 6 Link to comment Share on other sites More sharing options...
Captain Fastbastard Mayhem Posted February 7, 2017 Share Myles, i'd be helluva careful providing financial "advice" if you work in financial services, especially if you're a Rep, KI or similar. Just a word of caution from your friendly bikehub compliance dept.yeah, man. Very true indeed. It's a fine line between generic information and targeted advice. Thanks for the kick. I don't *think* I've gone over into the advising segment of it... Tried to keep it as generic as possible hence the disclaimers, caveats etc. I try to keep it as clean as possible, but if I do veer into "advice" rather than info, then feel free to give me a nudge. Edited February 7, 2017 by Myles Mayhew nonky 1 Link to comment Share on other sites More sharing options...
marko35s Posted February 7, 2017 Share Myles, i'd be helluva careful providing financial "advice" if you work in financial services, especially if you're a Rep, KI or similar. Just a word of caution from your friendly bikehub compliance dept.Generic comments given to a group normally fall outside the remit of advice.More often it is considered to be opinion rather than advice. That said the line can get a little blurry at times. Sent from my ALE-L21 using Tapatalk Captain Fastbastard Mayhem and nonky 2 Link to comment Share on other sites More sharing options...
Paul Ruinaard Posted February 7, 2017 Share It is possible to use debt finance wisely and to your advantange...Yes its called leverage. But to truly create leverage you need an income stream which you can use to service debt If you get leverage right you will end up with all the risk and money coming from the finance providers and all the revenues paying off the debt and you end up with the capital asset on your books. Done correctly it's the single biggest way to get rich quickly and is what Don aka PoTUS was very good at. Done incorrectly and by thieves you end up with nuclear holocaust. Captain Fastbastard Mayhem 1 Link to comment Share on other sites More sharing options...
Captain Fastbastard Mayhem Posted February 7, 2017 Share Brilliant, the next time I want to get some foreign investment advice, I'll just ask the BikeHub about where I can get an XT cassette......out your ass... Patchelicious and bertusras 2 Link to comment Share on other sites More sharing options...
shova1 Posted February 7, 2017 Share Brilliant, the next time I want to get some foreign investment advice, I'll just ask the BikeHub about where I can get an XT cassette...... Patchelicious 1 Link to comment Share on other sites More sharing options...
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